All posts tagged political union

The illuminated Euro sculpture in front of the European Central Bank in Frankfurt.

Europe’s politicians and their voters should pause for thought during the swelling crisis sweeping Euroland and reflect on the sobering fact that no monetary union has succeeded long-term without being underpinned by political union.

Successful examples include British monetary union between England and Scotland, which has operated since 1707, anchored by political union centered in London. A more recent example is German unification in 1990 that bound the former DDR with West Germany under a united political order.

Longer lasting is the 19th Century Italian monetary union which followed political union in 1861 and remained in place until Italy joined the single currency in the movement’s first wave of 1999.

And there have been examples where smaller countries have successfully bound their currencies together without recourse to political union, provided there has been genuine economic convergence, an example being the 1923 currency union established between Belgium and Luxembourg.

But where these supports have been lacking, failure ultimately resulted.